Jumia Announces 58% Growth in Revenue in Q1 2019 Despite Fraud Allegation
Jumia has posted its first quarterly report for 2019, revealing a pretty impressive growth in revenue and gross merchandise value (GMV). According to Jumia Q1 2019 report, GMV stood at €240 million.
This figure is 58% larger than GMV posted in the same quarter in 2018. The reality however is that Jumia’s quarter on quarter GMV grosses has declined. And for good reason too.
While Q1 2019 GMV stood at €240 million, in Q4 2018, this was €311 million.
Of course Q4 is always the busiest period in retail, so that decline should not come as too much of a surprise.
Jumia’s customer base also witnessed some growth in the first quarter of 2019. The ecommerce company gained 300,000 new customers in Q1. The gain is its second biggest quarterly growth since January 2018.
Jumia revenue, according to statistics released by Proshare, jumped from €28.3 million in Q1 2018 to €31.8 million in the first quarter of 2019. Gross profit equally rose during this period. While in Q1 2018 it stood at €8.6 million, in Q1 2019, it jumped to €15.7 million. That’s an outstanding 82.3% growth.
The Jumia Q1 2019 report also shows there is still a lot of potential for the ecommerce company.
However the earnings call comes just days after a damaging report was put out by Citron Research. According to Citron, Jumia is a fraudulent company that used the IPO route to help produce a questionable exit for its early investors.
The report is behind a wave of investor panic that led to the selling off of Jumia shares over the last week. Originally trading above $40 two weeks ago, Jumia Share price crashed to as low $18.13 last Friday. It later picked up to close at $24.50 that day.
Although there were many inaccuracies in the report, Jumia, its shareholders, and even banking partners have been rather quiet. So far only Citibank has come to its defense.
While the report may not impact its revenues going forward, it has affected investor perception. Jumia would have to respond with more disclosure as they are now bound to by virtue of an IPO.
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